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Apple iAd: Monopolizing Big Data

Apple’s new digital advertising product iAd offers customers the option to advertise within certain apps, handled in Germany by Tomorrow Focus Media GmbH. iAd offers full screen, rich media adverts for the iPad, iPhone and iPhone touch, though advertisers are still able to use the traditional way of implementing ad´s within apps and mobile websites via publishers.

The main question with this new offering is why advertisers would prefer buying through iAd to traditional publishers. Most publishers already offer full, rich media ads within the same apps which are part of the iAd rotation, plus iAd’s are often a more expensive option.

The answer is iAd’s targeting options. Since Apple launched its famous music store iTunes, millions of users have set up accounts, mostly including detailed personal information. Over the years, iTunes has not only offered music but also movies, magazines and newspapers, as well as different applications to these users. Apple has kept track of each user’s behavior and interaction with these offerings, which in turn has led to huge quantities of big data. Combining behavior with the basic demographic data, Apple is in a very good position to create a vast array of targeting options for advertisements. However, they are not sharing this data freely. Currently for advertisers, Apple only offers the following targeting criteria: demographic data, app categories (sports, music, television etc.), country and device. iAd will also not provide advertisers with the actual apps the ads are displayed, which is a huge disadvantage for monitoring and the transparency of online campaigns.

A normal campaign would follow this process; the client sets up a target group and a campaign goal he wants to reach. Apple would then estimate which app categories the target group is using the most and will display the ad over several apps within the suited categories. However, Apple’s dilemma is that they could share the exact apps they use for iAds but on the other side, they will not give up the data they have and in turn lose iAd custom. If advertisers had a detailed list of apps where they could find their target group, they would probably run campaigns directly with preferred publishers and partners who are cheaper. Also, app categories can distinguish heavily from the campaign message and creative. For example, communication about a sensitive topic to a serious target group doesn’t mean that iAd isn´t running in informal apps. If the apps are very popular, they are probably used by any target group. Therefore, iAds might be placed incorrectly if Apple do not consider the individual advertising message and use audience data alone.

Nevertheless, Apple is in a powerful position with over 10 years of customer data, giving Apple amble experience in collecting and using data effectively to find a particular target group. Only Facebook and Google can match this degree of user data and this is why the Apple ecosystem is so attractive to advertisers and companies alike.

Advertisers and marketers can only hope the giant from Cupertino will offer more transparency for digital campaigns in the near future, though as a monopoly in their field, there is little incentive to do so.